How I Paid Off $4500 in Debt in 8 Months and Still Travel

You know what they say — if you truly want something, you’ll always find a way and if not, you’ll always have an excuse.

A life of travel is something that I truly want, more than anything actually. I don’t spend on shoes, clothes and bags but I spend a lot when it comes to travel.

Even when I was in a financial rut 9 months ago, I refused to let traveling take a back seat. I’d rather sacrifice other things than forego traveling. My love for travel was too much to let go.

We all have our vices, and traveling is my vice.

When I hit rock bottom 9 months ago, it was no question that I had to pull my shit together and fast!

I had financial obligations that I need to take care of and the only income I was getting was from the online business that my ex and I started. It wasn’t enough though, I still needed a more stable income.

So, I had to set my priorities straight —
  1. Find a job
  2. Start paying off my debts
  3. In a year or less, go traveling again

These priorities were non-negotiable.

In late March, I was able to finally land an online job. I tried looking for corporate jobs thinking it would be easier considering I had more than a decade of experience plus my post-graduate degree.

Sadly, with all the applications I sent out, no one bothered to give me a call. I guess my decision to quit my job and travel to the other side of the world for 14 months made me a flight risk. But I will never regret that decision.

I know I was more than qualified, so it kinda surprised me why no one wanted to hire me. But rather than letting it get to me, I just saw at it as a blessing because I never really wanted to go back to the corporate world anyway.

The online job I got just came in at the nick of time. Income I was getting from the online business was getting smaller and smaller each week so I badly needed a stable income.

The pay I was offered was actually low ($640 monthly) but it’s better to have money coming in on a regular basis than nothing at all. At that time, I’ll take what I can get.

Priority 1, check.

On to my next priority — start paying off my debts.

I have always tracked my expenses and I did it old school. Instead of using different apps, I use excel spreadsheet to track my income and expenses.

Every penny that comes in and comes out of my pocket is accounted for. I get slightly neurotic if there’s even a slight discrepancy in my accounting.

At the end of each month, I know how much money I spent on food, transportation and miscellaneous expenses. And if I go overboard on one thing (i.e. too much miscellaneous expense), I will make the necessary adjustments the following month.

Now that I have regular income, I adjusted my spending habits and 70% of my income go straight to my debts. I didn’t include income from my online business because it can be very unpredictable. So I simply consider that as a bonus.

I listed down everything that I needed to pay and identified the ones that need to be paid asap. The bad debts as they call it — those accumulating interest. I only had one bad debt — credit card bills! But that was more than enough.

I quickly devised a plan on how to get rid of that — I asked the bank if they could divide my total bill into 12 equal payments. They accommodated my request but with interest of course.

Again, I’ll take what I can get.

I was fine with it than to pay on a monthly basis and my payment will only cover the interest alone. I didn’t want to lose any more money so I went with it.

As for my other debts, I had a payment schedule for each, which was highly dependent on urgency.

Now, because 70% of my income was going straight to debt payments, there was barely enough room for anything else. I had to make certain sacrifices but traveling ain’t one of those sacrifices that I made —

  • I barely ate out and opted to cook instead
  • I haven’t gone shopping in a long time
  • I chose low-cost coffee shops when I needed to get out of the house and work on something instead of going to Starbucks
  • When my friends wanted to hangout and have a wine night, we will just go to someone else’s place and just drink there instead of going to an expensive bar or restaurant
  • And instead of riding Uber or taxi, I used public transportation

I didn’t have a budget. I spent what was left of my income after debt payments.

Was it a big adjustment on my part? I’d say no because I know that this was something I needed to do and the more I delay it, the longer I would have to make these sacrifices.

In a span of 8 months, I was able to pay off $4500.

For the first 4 months, I was only earning $640 monthly. The following 4 months, I had an increase and started earning $900 monthly.

I had total earnings of $6,160 and 73% of that was used to pay off my debts. The remaining balance was then used to cover for food, transportation and miscellaneous expenses.

Priority 2, check.

On to the last priority – go traveling again.

I mentioned earlier that traveling wasn’t one of those sacrifices that I was willing to make. And I didn’t.

In fact, in those 9 months, I was able to go to 5 local destinations (La Union, Mt. Ulap, Palaui island, Calaguas and Boracay) and 2 new international destinations (Taipei, Taiwan and Seoul, South Korea).

How in the world did I manage to do that and where did I get the money?

I got the money from my online business. I treat the income I get from the online business as a bonus because it can be very unpredictable. And I wasn’t motivated at all to run the business from March until May because of personal reasons, so it was barely making any money.

It was only in August that it started picking up again. And last November, I hit a record-breaking sales. It was the second highest month after January.

Before you get any ideas, the income I was getting from the online business still wasn’t enough for me to quit my online job and I still need to strategize because traveling costs money.

Here’s how I did it:
  • I booked tickets in advance to get a good deal (Note: my RT flight to Taiwan only cost $60 and my RT flight to Korea only cost $95)
  • Looked for cheap accommodations
  • Local trips were with friends so the cost were divided amongst us
  • Trips to Mt. Ulap, Palaui and Calaguas were all DIY

My weakness though is spending on food. I do spend a lot on food when I travel but I believe money spent on food is money well spent.

Priority 3, check.

Where do I go from here?

I still have financial obligations to take care of. Yes, I was that reckless with my money. But I am learning now and it is never too late to become a financial literate.

I will also continue traveling. As a matter of fact, I will be spending New Year’s in Hong Kong with the family [my 3rd for the year] and 2018 will be the year where I get to travel long-term again.

As I see it, it is never about having a lot of money, but rather, how well you manage your money.

At the end of the day, these are the steps I am taking to create the life that I want so I can live the life that I love. It’s always a question of how badly I want to make things happen for myself and how determined I am in turning my dreams into reality.

Now tell me, the life that you want for yourself, how badly do you want it?

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